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Centum, developer set to start work on Sh388bn Vipingo Industrial park in Q2
From left: ALN Kenya Managing Partner Daniel Ngumy, Centum Investment Company CEO James Mworia and State Department for Investment Promotion Principal Secretary Abubakar Hassan Abubakar during the on-Service Sector Special Economic Zones meeting at Two Rivers mall on September 28, 2023.
Centum Investment Company has signed a deal with Pan-African developer ARISE to jointly establish a Sh388.2 billion ($ 3 billion) industrial park within the Vipigo Special Economic Zone (SEZ) in Kilifi County beginning the second quarter of the year.
Centum Group Chief Executive James Mworia said the 2,000-acre Vipingo SEZ would be developed into a business park with a manufacturing and logistics hub projected to create 500,000 jobs.
The project, to be jointly funded by Centum and ARISE, will kick off between April and June.
“The Vipingo Special Economic Zone will feature an industrial zone, with available spaces for investors starting from one hectare. The commercial zone will feature hotels and restaurants” the Nairobi Securities Exchange-listed firm said following the signing of the joint development agreement on Thursday.
“A residential zone will have apartments and villas, the logistics zone will have warehouses and parking facilities while the port area will offer access to resources such as gas and renewable energy.”
Vipingo was granted an SEZ status by the Investments, Trade, and Industry Ministry on November 29, 2024, cementing the coastal region’s dominance as a host of such hubs meant to drive economic growth through exports and job creation.
Kenya now has 39 licensed SEZs, with 10 located within the coastal economic bloc.
SEZs are designated areas within a country that offer unique economic incentives and regulations, distinct from the rest of the nation, to attract foreign and domestic investment and boost economic growth.
The incentives range from preferential taxes and power tariffs to spur growth.
“We are honoured to announce this ambitious development agreement, marking a key milestone for expanding our industrial model in East Africa. By leveraging our expertise in managing special economic zones, we aim to contribute to the development of the local economy and position Kenya as a major player in the transformation of raw materials in the region and globally,” said Gagan Gupta, founder and CEO of ARISE IIP.
As a strategy to woo investors, the Trade, Investment, and Industry ministry recently introduced wider incentives for SEZ businesses.
A review of the amendments to the SEZ Act signed into law last December revealed deeper tax exemptions and an expanded range of economic sectors that would be covered under the concept. For example, the new law amended the Income Tax Act to exempt SEZ enterprises, developers, and operators from corporate income tax for the first 10 years from the date of first operation.
Previously, SEZ enterprises, developers, and operators were entitled to a reduced 10 percent corporate income tax rate for the first 10 years from the date of the first operation, 15 percent for the next 10 years, and a standard rate of 30 percent for the period thereafter.
